US cut fails to boost FTSE

London’s FTSE 100 Index remained stuck in the red today, despite the second big US interest rate cut in nine days.

The Footsie fell 68.7 points to 5768.6 by mid-morning as investors had already factored in yesterday's 0.5% cut from the Federal Reserve. It followed the 0.75% cut last week aimed at stimulating the all powerful US economy.

Traders in London took their cue from New York, where the Dow Jones Industrial Average ended on the back foot. And the mixed reaction in Asia, with Hong Kong’s Hang Seng index down nearly 1%, added to the weak sentiment.

In London, Friends Provident led the fallers board despite announcing a major overhaul including the loss of 600 jobs. Fears over current trading meant shares in the pensions and life company were down 17.9p to 137.3p.

Standard Life, which lost the head of its retail arm to Friends earlier this week, was also down 5.25p to 218.75p.

A host of banks lost ground amid the economic worries in the US, with Royal Bank of Scotland off 17.75p to 367.5p and Barclays down 30.75p to 447.75p. Halifax Bank of Scotland slipped 36p to 667p, and Lloyds TSB fell 15.75p to 422.25p.

Building supplies firm Wolseley, which does most of its business in the United States, also lost ground. Shares were off nearly 2%, or 12.5p, to 685p.

Amid the weak trading, shares in oil giant Royal Dutch Shell failed to respond to its record profits haul of £13.9 billion announced today. The stock was down 17p to 1727p, reflecting disappointment at trading in the fourth quarter.

In the second tier, shares in pub chain Mitchells and Butlers were down nearly 10%, or 45.5p to 427.5p, losing some of the gains yesterday following bid talk.

Leading the Footsie’s risers board was cruise ship firm Carnival, up 34p to 2111p, amid a positive outlook for the travel industry.